A Tale of Two Housing Plans

Four months into his term, Mayor Bill de Blasio, who continues to declare his commitment to reducing inequalities in New York City, issued a 116-page report, “Housing New York: A Five-Borough, Ten-Year Plan.” But do the many big and little proposals in the plan add up to a break with the Bloomberg years of unabashed promotion of luxury development and gentrification, or are they a kinder, gentler version of the same?

Housing and community activists and all those concerned about inequality are trying to sort it all out, but it really doesn’t make much sense unless we look at it as two housing plans. One is a plan for new housing development and the other is a plan for keeping rents down and preserving neighborhoods. The problem is that the two plans contradict one another, and it looks like the development plan will be the priority.

Build, Build, Build

The de Blasio development plan got the biggest headlines because it is the most concrete (literally), immediate and likely to be implemented. It includes a giant housing development scheme that promotes the creation of 200,000 new affordable housing units in the city over the next 10 years, 40 percent of them in new construction. Added to this are promises of new opportunities for luxury development. The city would rezone in strategic areas to promote new building, allow for taller buildings, let landowners transfer their development rights to hot locations, continue tax and infrastructure subsidies to developers and streamline land use, environmental and building regulations. It’s no wonder that Crain’s reported that the city’s largest real estate developers are gushing with praise for the plan. Construction unions are also satisfied.

The real estate moguls can’t conceal what too many have a hard time recognizing: the new mayor’s plan would not undo the enormous opportunities for new private development opened up by Bloomberg. It volunteers even more government help for those who need it the least. The de Blasio “affordable” housing proposals are fundamentally no different than Bloomberg’s, which produced approximately 165,000 units of housing during the 12 years he was in office. The new plan would shuffle the definitions of affordability, making a larger proportion of units available for people in low-income brackets without changing the way “low-income” is defined (50-80 percent of the Area Median Income, which can be up to $67,000 a year for a family of four).

The Preservation Plan: Good Intentions

The other de Blasio plan speaks to the real concerns of people who find themselves facing incredibly high rent increases, intimidation and the illegal flaunting of rent and eviction controls by landlords. This is basically a community preservation proposal. In his introduction to the plan, de Blasio says we must “protect neighborhoods” and “engage communities.” In an indirect reference to the phenomenon many of us know as gentrification — a word that never appears in the document — the mayor states, “If you’re in a community where affordability is dropping, we want to protect it.”

The preservation plan speaks to the widespread frustration and anger of renters and homeowners who were and are victims of the speculative real estate fever that forces them to move out of neighborhoods they have lived in for decades and generations. This de Blasio plan promises that new housing, better services and community involvement will allow more residents to stay. It echoes calls by tenant groups to repeal the State’s Urstadt Law and allow the city, not Albany, to govern rent regulations. It also takes a step away from using homeless shelters and toward creating decent housing opportunities for people in greatest need.

But when you get down to the details, the plan is filled with only small steps forward and vague promises. In some areas, it makes only weak gestures toward solving deep flaws in rent regulation. For example, it responds to the structural flaws in the city’s housing court by recommending more pro bono lawyers, not a system overhaul. It is silent on the tenant demand to stop removing housing units from rent regulation, even though protecting and improving rent regulation is surely the best way to support affordable housing and stabilize neighborhoods.

Masking the Problem

In the mayor’s plan, creating new housing remains the overriding mission, not saving neighborhoods. The term displacement appears in references to two specific programs and in two footnotes, but is never used to denote a fundamental problem. Since the proposal never targets the basic problem, it can’t really help resolve it. When all is said and done, the 200,000 affordable housing units in the first plan are touted as the solution to the problems addressed in the second plan. In practice, under Bloomberg and now under de Blasio, the promised building boom masks the deeper problems of gentrification and displacement, and the even deeper questions of racial, ethnic and class divisions. It appears that the authors of the document avoided raising the issues of gentrification and displacement not just because they are politically charged but because the use of these terms would question the fundamental objectives.

The glaring truth that the new mayor has not sought to hide is that during the Bloomberg years more affordable housing units were lost than built. Yet there is a huge disconnect as the new mayor, instead of learning from this cautionary tale, has doubled down and sought to one-up Bloomberg on the construction front.

At bottom, developers typically argue, the housing problem is all about supply and demand. Let us increase the supply, they say, and there will be more housing to go around for all. This, not rent regulation, will keep rents from rising. That’s good old trickle-down economics, which never works. Indeed, we’ve just come through a couple of decades in which the total housing supply has grown dramatically, and so have rents, but there was also a huge loss of low-rent housing. Over the last 20 years almost 250,000 units of rental housing were deregulated.

The Land Market

The trickle-down approach conceals a fundamental truth: the market driving everything is the land market, not some mythical housing market. Developers and investors choose areas where future land values are higher than current ones and try to build on this land so they can make a profit from rising land values. This is why the elementary principles of real estate are “location, location, location.” It is also why “dislocation” or displacement is a virtually inevitable companion to new development. It is the reason our neighborhoods need better means for controlling land use, not just more housing.

Private Sector Paradigm

A central premise of Mayor de Blasio’s affordable housing plan is that the only way the public sector can act is in tandem with the private sector. De Blasio’s plan includes, for example:

• A continuing interest in private development on public housing land. Referring to the New York City Housing Authority (NYCHA), the plan targets “underused NYCHA land and development rights.” While proclaiming a willingness to take into consideration “tenant needs,” the plan treats public housing as a “land use” problem and real estate opportunity, and not as many large communities imbedded within larger communities. While Bloomberg’s proposal to build luxury housing on eight Manhattan public housing sites has been put on hold, the notion that the authority’s green spaces are a gold mine for development opportunities persists.

• The introduction of mandatory inclusionary zoning in areas ripe for development. Inclusionary zoning allows developers to build higher when they provide some affordable housing units (under the current rules 20 percent of the units must be affordable; new rules may increase this proportion). Under Bloomberg, inclusionary zoning was an option subject to the discretion of the developer, and helped to sell zoning proposals to wary communities. The de Blasio administration wants to make inclusionary zoning mandatory in areas that it chooses to re-zone and would continue public subsidies for the inclusionary housing units. The problem with this is that inclusionary zoning will be an even greater weapon for developers to wield against communities. The majority of new housing, invariably built for the luxury market, is still bound to drive up housing prices and rents and displace more affordable units than it creates. That is what happened in the Bloomberg years. Let’s call it what it is: gentrification and displacement, not reducing inequalities.

• Allowing landowners to sell their unused development rights to desirable “hot” spots in the real estate market. This is a dream of big real estate investors that would create a sort of financial market in land use and allow high-rise areas to get even higher, thus maximizing profits for land speculators.

— Tom Angotti

The city’s housing plan states that the problem is that supply does not match demand. The solution: increase the supply and, through government subsidies and regulatory actions, make sure that more new units are “affordable.” But the explanations for the presumed shortfall are suspect. While noting the decline in new building since 2008, there is no acknowledgment that it had anything to do with the collapse of the mortgage market. Also, the plan claims the city’s population is bound to increase in the next decade, and the need for smaller housing units along with it. By encouraging the development of smaller housing units it would actually welcome more gentrification. Younger single adults, professionals and the so-called creative class pay higher rents and are more mobile and less aware of rent laws. In effect, by shaping the future supply it would also shape future demand.

Another way to understand the huge gap between the two plans is to look at de Blasio’s outspoken commitment to public-private partnerships as the basic underpinning of city housing policy. The aim of City Hall is to “leverage markets.” While the mayor hopes to put up $8.2 billion in city dollars, he expects that the vast majority of the funds, $30 billion, will come from the private sector, which is of course in the game to build more, make money and produce affordable housing whenever it helps their bottom line and buys community support.

Overlooking Communities

During last year’s election campaign, de Blasio smartly recognized the well of discontent with Bloomberg’s elite, top-down approach that ignored local voices and bought loyalties from potential opposition. Yet both his development and preservation plans exclude any decisive role for communities in the planning process. While the mayor hopes to hire more professionals in the city’s planning and housing agencies, he offers no new opportunities for neighborhoods to make their own voices heard beyond the inadequate public meetings run by the agents of City Hall. Under the Bloomberg administration, the City Planning Department pushed 140 rezoning proposals through the approvals process, using a skillful Madison Avenue approach with lots of public meetings, romantic pictures of new development and vows of sincerity by city officials. Bloomberg’s manufactured participation buried grassroots plans and the now-defunct Campaign for Community-Based Planning. For the city-planning machine, communities became consumers and not the makers of their own destinies.

De Blasio’s planning director, Carl Weisbrod, promises more of the same and is further legitimized by the mayor’s commitment to use zoning to increase the number of affordable housing units. Weisbrod is a skillful negotiator and played a key role in the redevelopment of Times Square and Lower Manhattan after 9/11. Now he will hone his skills by confronting neighborhood resistance to higher-density luxury housing development and negotiate the always-limited supply of affordable housing units to pacify the opposition.

Notably absent in the housing plans are the city’s 59 community boards. These, for better and for worse, are the only official institution for democratic land use decision-making at the neighborhood level. But they have no professional planning staff, a bare-bones budget and appointed volunteer members who often fail to represent large sectors of neighborhoods. De Blasio’s plans do not even mention community boards. By allowing these forgotten institutions to languish, developers and their allies in city government can continue to cut their deals with local groups behind closed doors — and at the same time wag their fingers at community boards for being a charade!

The absence of community power is glaring in the housing plan’s proposals to assemble and develop small vacant lots around the city. There is no hint of a community-based planning process that would give neighborhoods — many of which have struggled with abandoned property for decades — the chance to say which lots should be for housing and which ones dedicated to public space, community gardens or other purposes.

Will Tenant Groups Follow or Lead?

Now that we know the city’s two-pronged strategy, the open question is what progressive individuals, groups and coalitions will do. Do we have a strategy?

One of the strongest impulses of those who fight for affordable housing is to accept the power of developers as inevitable, leaving us to negotiate for what we can get from the development plan — more “affordable” housing or other community benefits. This defeatist notion forces us to accept the bedrock neoliberal philosophy that private power is not only a given but the only legitimate power. Government, therefore, must follow the lead of private capital. This was the path charted under Bloomberg and we have forgotten that resistance is an alternative.

A particularly vocal segment of the community-based organizations allied with nonprofit housing developers and political groups close to the mayor and the liberal wing of the Democratic Party were not only involved in shaping the housing plan but stand to benefit from the largesse flowing from new public-private development. For example, the Association for Neighborhood and Housing Developers (ANHD), the city’s largest coalition of housing groups, prominently advocates mandatory inclusionary zoning and continues to press for more development opportunities that would benefit nonprofit housing developers in their alliance, even though many of their grassroots members consider preservation a priority.

The groups focused on preserving and strengthening rent regulations and limiting landlord abuses are building alliances for the forthcoming battles in Albany to strengthen rent regulation. Many openly deal with and name gentrification and displacement. New tenant coalitions such as the Crown Heights Tenants Union have emerged in neighborhoods facing increasing development pressure. New alliances are forming between tenant and community groups and nonprofit housing developers, but the city’s bifurcated housing plan may very well pull them away from each other. The divided housing movement is in a weak position when it comes to moving housing policy further in a progressive direction. Until we develop a unified strategy of our own, the responses to the city’s dual housing policies will also remain weak.

Tom Angotti is professor of urban affairs and planning at Hunter College and the Graduate Center, City University of New York. He is the author of New York For Sale: Community Planning Confronts Global Real Estate (MIT Press, 2008).